Reed Discusses the Need for Additional COVID Relief Package
Madam President, I rise to support efforts by my Democratic colleagues to pass much needed and delayed economic measures by unanimous consent. It is painfully obvious that the economy is in bad shape.
Families and small businesses continue to struggle and there is a real need for further Federal assistance. In order to get our economy back on track, this body must take action in crafting another comprehensive, bipartisan COVID relief package, and it must include additional help for families and communities including eviction and foreclosure prevention assistance, as well as additional help for State and local governments.
Last night the Senate unanimously extended the PPP application window. This was a tiny but needed step in recognizing the depth of the economic crisis Americans are facing. Now the question before us is, will Republican leaders allow this body to work its will and provide needed, targeted, and effective rescue assistance, or will it continue to delay and deny assistance which will only prolong the pandemic, deepen the financial hole, and make the remedy costlier and recovery steeper?
Strong State and local governments are critical to our economy. Indeed, according to the Center on Budget and Policy Priorities, State and local governments provide about 20 million jobs and contributed 8.5 percent to the national GDP in 2019. They did so by not only serving as customers and clients for our local and national businesses, but also by providing the essential services, such as public infrastructure, a strong education system, and other necessary functions that provide the business certainty that make our country attractive to businesses and investors throughout the world.
We should do everything possible to maintain our country’s comparative advantage relative to other countries. But today, as a result of the tremendous economic shock created by the coronavirus and the lack of a coherent public health strategy from the Trump administration, estimated State revenue shortfalls will total about $615 billion over the next 3 fiscal years, not including the added costs of fighting COVID–19. This is just for the States— $615 billion. This is why I initially fought for $750 billion in the Coronavirus Relief Fund when negotiating the CARES Act and introduced S. 3671, the State & Local Emergency Stabilization Fund Act, which would provide an additional $600 billion to State and local governments to supplement the $150 billion in coronavirus relief funds I secured in the CARES Act.
Madam President, would it surprise you to learn that the Trump Treasury Department has needlessly created a bureaucratic regulation that makes it difficult for States to use these coronavirus relief funds? And that this regulation is standing in the way of what should have been an immediate $150 billion boost to our economy, which even the Chamber of Commerce thinks is burdensome.
Because of this onerous Trump rule, States can’t use the coronavirus relief funds to replace lost or delayed tax revenues in order to maintain public services. That is what Neil Bradley, the U.S. Chamber’s chief policy officer said in an interview, ‘‘Part of our conversation with Republicans on Capitol Hill is that, ironically, if your concern is big State government, then the last thing you need to do is force States to replace one-time lost revenue with permanent tax increases.’’
As the primary author of the Coronavirus Relief Fund, I can tell you that it is fully within the Treasury Secretary’s authority and the intent of the CARES Act for these funds to be used to replace lost or delayed tax revenues and maintain public services. To prevent the flexible use of these relief funds is a choice that is neither required nor intended by law.
Unfortunately, this completely unnecessary choice has already created avoidable economic harm. Since February, State and local governments have cut a total of 1.5 million jobs, an 8-percent drop that is twice the decline seen during and after the 2007–2009 recession. In addition, the Center for Economic and Policy Research reports that ‘‘job losses forced on State and local governments by pandemic-related shortfalls will disproportionately impact the African American workforce...14 percent of state and local employees were African American compared to 11.7 percent of private sector employees, a margin of 20 percent.’’ As the Wall Street Journal reported in a May 24, 2020, article titled ‘‘State and Local Budget Woes Create Drag for Economic Recovery Prospects″:
Based on evidence from the last recession, Mr. Chodorow-Reich, a Harvard economics professor, estimates that every dollar in cuts costs the economy $1.50 to $2. He also said every additional dollar in spending adds $1.50 to $2 to the economy. Of all the regulations that this administration seeks to cut, it should start with this one if it really wants a healthy economy. With just one stroke of the Treasury Secretary’s pen, our economy can receive a direct multibillion dollar jolt today. But to be clear, this administrative fix is by no means sufficient because of the massive revenue shortfalls our State and local governments are facing. Congress still needs to provide additional and flexible fiscal relief to our State and local governments as part of its next fiscal package, and it is my hope that S. 3671, the State & Local Stabilization Fund Act, is included.
As I indicated earlier in my remarks, keeping families in their homes also must be included in the next package. According to Nicholas Chiumenti, with the New England Public Policy Center in the research department at the Federal Reserve Bank of Boston: If current economic activity does not improve substantially, without an extension of the CARES Act, unemployment insurance or additional stimulus money or other fiscal relief, up to 13 percent of homeowners and 33 percent of renters in Rhode Island are at the risk of being unable to pay their mortgage or rent payments. This represents over 80,000 Rhode Island households. Nationally, according to census survey data, 23 percent of all adults reported being housing insecure in midJune, meaning that they had missed last month’s rent or mortgage payment or had slight or no confidence that their household could pay next month’s rent or mortgage on time. We know that behind each one of these numbers is a family that can be homeless at the worst possible time in the middle of a public health emergency. For some, given their current health situations and age, there will be an additional human toll that we surely should strive to avoid. We implore our colleagues on the other side of the aisle to work with us to keep our constituents in their homes so that they too can make it to the other side of this public health emergency.
In that spirit, I draw your attention to S. 3620, the Housing Assistance Fund. This legislation expands the existing ‘‘Hardest Hit Fund’’ model and provides it with additional resources for each State to keep families in their homes, the utilities on, the internet connected, and the property taxes paid. As a result, landlords who are also struggling to pay their own bills would receive some assistance. Madam President, it is not every day that the Independent Community Bankers of America and the Credit Union National Association support the same legislation with consumer rights and affordable housing organizations, such as the National Housing Conference, the National Low Income Housing Coalition, the Center for Responsible Lending, and the National Consumer Law Center, among others.
As we work toward this next fiscal relief package, I hope you and our colleagues will consider joining with us in enacting S. 3620, the Housing Assistance Fund. But we can’t stop there. We must also immediately, among other needs, increase SNAP benefits to help the almost 150,000 Rhode Islanders who are food insecure during this crisis; boost public health efforts to help keep the virus at bay, from more testing and contact tracing to supporting our healthcare providers, to developing effective vaccine deployment systems; help childcare centers, public schools, and college campuses to safely reopen and support libraries in keeping our communities connected; provide relief for the hardest hit small and mid-sized businesses, many of which will continue to be shut down for the foreseeable future; and safeguard our election infrastructure, as Russia and other foreign actors seek again to use voter suppression, hacking, and disinformation in the 2020 elections.
What exactly are we waiting for? Is it not enough that, according to a June 29 CNBC article, ‘‘the employment-population ratio—the number of employed people as a percentage of the U.S. adult population—plunged to 52.8 percent in May, meaning 47.2 percent of Americans are jobless, according to the Bureau of Labor Statistics? Is it not enough that 46 percent of Business Roundtable CEOs expect employment at their companies to decrease in the next 6 months? We don’t need to inflict any further unnecessary economic pain and suffering. I would also urge my colleagues to consider the costs of inaction.
Indeed, during an April 29, 2020, press conference, Federal Reserve Chairman Powell stated: I have long-time been an advocate for the need for the United States to return to a sustainable path from a fiscal perspective at the Federal level. We have not been on such a path for some time, which...just means that the debt is growing faster than the economy. This is not the time to act on those concerns. This is the time to use the great fiscal power of the United States to do what we can to support the economy and try to get through this with as little damage to the longer-run productive capacity of the economy as possible.
This week we are also considering the National Defense Authorization Act, and every year for the last 59 years, Democrats and Republicans have come together to strengthen our national security and to help all Americans. We have proven that we are more than capable of working together productively on the most complex and controversial issues in service of our constituents, and we would like to continue that not just in the context of national defense but in the context of economic prosperity and security. One final point. We also need to extend unemployment compensation insurance because we know it will run out, and everyone has told us that unemployment rates will not drop dramatically. They will stay persistently high. People will need this assistance going forward. We must do more, and I hope we can do much more going forward.
I yield the floor.